Gary Parr, vice chairman of Lazard Ltd. (LAZ), said financial-services companies are $500 billion short of capital and some European banks require “meaningful capital injections.”
“A number of banks would be out of business” if they marked their assets to market prices, Parr said today in an “Inside Track” interview on Bloomberg Television. “That still suggests to me, yes, there are a number of banks that need meaningful capital injections and capital infusions.”
The 440-billion euro ($618 billion) European Financial Stability Facility bailout fund may need to be doubled, Parr said. European officials such as European Central Bank President Jean-Claude Trichet and International Monetary Fund Managing Director Christine Lagarde are right in pushing for a stronger ECB and a larger bailout fund, giving them power similar to former U.S. Treasury Secretary Henry Paulson’s Troubled Asset Relief Program, he said.
“A good thought was Paulson saying, ‘I need a bazooka, give me a big solution,’ and that’s when he pushed TARP,” said Parr, whose firm, the biggest non-bank merger adviser, is based in Hamilton, Bermuda. “He wanted it to be so big that the markets couldn’t test it. They wouldn’t test where is the vulnerability. I think that’s what’s happening in Europe.”
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